AQA BUSS4 Research Theme for 2015 - Manufacturing in the UK

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Supermarkets to “demand” loyalty from their loyalty card holders!

Saturday, January 17, 2015

A perfect (yet ridiculous) starter to introduce supermarket competitiveness. This Daily Mash mock-news-article lampoons the ironic concept of the “loyalty” card and highlights the desperate situation that the Big 4 are facing due to the unstoppable growth of the loyalty-card-less Aldi and Lidl.

It can be used as a spring board for discussions on customer loyalty, Unique Selling Points (or lack thereof), reliability of sources and strategies in the face of increasing competition.

To ensure students don’t quote the above article in their BUSS4 exam, below are some more serious ones from a reputable source!


BBC Sainsbury’s sales fall further

BBC Tesco to close 43 stores in the UK

BBC Morrison's introduce club card

How extraordinary, how exceptional, how unusual.

Monday, December 22, 2014

The run up to Christmas has been seen as a good time to bury bad financial news, however Tesco's auditors, Price WaterhouseCoopers now face an inquiry over the preparation and auditing of Tesco accounts from 2012 onwards. The Financial Reporting Council is the independent disciplinary body for UK accountants and actuaries.

It is possible that this inquiry could lead to pressure to break up the oligopolistic nature of auditing, currently dominated by 'The Big Four', viz.  Deloittes, Ernst & Young, KPMG and PWC. Ultimately it is up to the politicians to decide that this sector needs to be shaken up. 

2014 has been a particularly grim year for Tesco, and it's new CEO, Dave Lewis, still faces the challenge of restoring shareholder and customer confidence. 

UK Manufacturing - why did UK output fall by 0.7% in October?

Wednesday, December 10, 2014

Studying this year's research theme really requires students to have a solid understanding of the macroeconomic factors which affect the demand for products made by UK manufacturers. Yesterday, the ONS released the latest figures for changes in UK industrial output, which are worth spending some time on. Below I have extracted the key points of the ONS's report, and added some analysis of the reasons for the changes.

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UK Manufacturing and Porter’s Five Forces

The case of Premier Foods and the 'pay to stay' payments that they were extracting from their suppliers gives an opportunity to use the Porter's Five Forces model to analyse the food manufacturing industry in the UK. Last week, BBC's Newsnight carried a report about Premier Foods, who manufacture many key brands including Ambrosia, Mr Kipling, Oxo and Bisto.

The online report comes with a 5-minute video clip which sets up the topic nicely. Newsnight's Laura Kuenssberg interviews engineer Bob Horsely, who had a contract to supply maintenance services to Ambrosia's factory in Devon. He received a letter from Premier Foods saying that "We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas. We will now require you to make an investment payment to support our growth." When he queried this, he received another letter: "We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list." In other words, pay up or we won't buy from you any more. 

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Inside Rolls Royce – Manufacturing in the UK

Sunday, November 30, 2014

A fantastic documentary for the Section A Research Theme (bullets 2, 4 & 5), that also ticks a great many boxes for the BUSS1, 2 & 3 specifications.

Channel 4’s Inside Rolls Royce charts the production of the Celestial (a one-off showpiece car that has more bling than Liberace, as well as an optional £20,000 picnic hamper!). It covers many topics within Human Resources, Operations, and Marketing, but my highlights are as follows:

  • The front of house manager who checks the length of the grass
  • The relentless quality control that almost breaks a man
  • The marketing of the new Rolls Royce Wraith in Abu Dhabi, which includes hand selected movers-and-shakers from the city getting to test drive it around the formula 1 track

The documentary is available via this link (if you don’t have a C4 account, it takes only 2 minutes to register) and I’ve created a  worksheet with 29 questions (numbers correspond to the minutes) intended to promote discussion about a brand synonymous with British excellence.

Hope it helps

New entry to the discount supermarket segment

Thursday, November 06, 2014

If a business sees a market segment in which sales are predicted to double to the scale of 15% of the total market in the next five years, you would expect them to be quick to find ways to enter it. However, if you are Sainsbury's, and have a carefully nurtured image and market position to protect, you might baulk at rushing into the discount segment of the market, in case it interfered with that image or cannibalised your market.

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Manufacturing: Does the UK Steel Industry Have a Future?

Thursday, October 02, 2014

The FT produce some superb videos that are ideal for use in the Business & Economics classroom - and this one on the UK steel industry is another excellent teaching resource - particularly for students researching UK manufacturing.

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BUSS4 UK manufacturing

Wednesday, October 01, 2014

As BUSS4 students start on their research into UK manufacturing, one piece of data that they should keep an eye on is the CIPS Purchasing Managers Index. This is produced monthly by the Chartered Institute of Purchasing and Supply by surveying managers responsible for purchasing materials in manufacturing industries, and so it gives an indication of the level of activity. A reading above 50 (shown by the red line on the graph above) shows growth in activity, below 50 shows a decline.

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Tesco’s fall from grace

Tuesday, September 23, 2014

Tesco's share price slid again today, although the firm has announced that the new Finance Director Alan Stewart started work three months earlier than expected. 

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Every little counts against Tesco

Monday, September 22, 2014

News about Tesco's troubles comes thick and fast, today's bad news about overstating profits has wiped off 11.59% of the share price. It fell by 26 pence to £2.03.  

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Is China’s slowdown good news?

Thursday, May 15, 2014

There is plenty of concern about the slowdown in China's growth, and what this might mean for businesses looking at expansion via China. To what extent should those businesses be worried about slower growth? The issues here are very relevant to the external environment in China, and could be useful for bullet points 1 and 6:

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China’s exports losing low-cost advantages

Thursday, May 01, 2014

Boston Consulting Group have produced a fascinating new report which investigates the competitiveness of the world's top 25 goods exporting nations. Their press release highlights significant changes in the world order over the last decade. The newly-minted BCG Global Manufacturing Cost-Competitiveness Index incorporates four factors: energy costs, productivity, wages and exchange rates. That analysis shows that Mexico now has lower manufacturing costs than China, while Brazil is now one of the highest-cost countries, and the UK is the cheapest location in western Europe.

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Macroeconomic moves in China

Friday, March 28, 2014

I am cross-posting this from the Economics blog as I think it should be useful for BUSS4 students; in a rather low key report on the BBC website this week, I found the shock news that China had a trade deficit of $23bn in February. This is alongside the HSBC Purchasing Managers’ Index (PMI) which focuses on small privately owned businesses, and which gave a reading of 48.1 for March, compared to 48.5 in February - with any figure below 50 indicating a contraction in manufacturing activity. And today there is a forecast of the ‘official’ PMI, which looks at the larger state-owned factories; although this is slightly over the ‘expansion’ measure of 50, it is only predicted to come in at 50.3 - and is subject to a 0.3 downwards correction to allow for seasonal patterns, according to Louis Kuijs, chief China economist at the Royal Bank of Scotland.

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Alibaba - Ali you need know!

Sunday, March 23, 2014

A combination of excellent news articles from last week have helped my students and I to fully understand the size and scope of Alibaba. Former teacher (and self-confessed technophobe) Jack Ma’s online company has experienced exponential growth and led to fear and envy from some of China’s (and the world’s) biggest companies. However, in his modesty he has described himself as “a blind man riding on a blind tiger”, giving him instant legend-status in our eyes!

The attached presentation has videos, hyperlinks and infographics that allow students to focus on the various elements that have led to Alibaba’s potential $150bn valuation. Each slide focuses on a different section from the BUSS4 specification thus giving information on leadership, strategy, competition, diversification and the economic (electronic) environment.

Hope it helps.

China – has the “domino effect” begun?

Wednesday, March 12, 2014

Speaking at his annual address to parliament, premier Li Keqiang said “we are at a critical juncture where our path upwards is very steep… deep-seated problems are surfacing; painful structural adjustments need to be made”.

This comes at a time when there are reports of a potential sub-prime debt crisis in the “shadow banking” sector (worth between $604bn - $3.7 trillion, depending on the source).

Also, according to the Ministry of Human Resources, the number of job openings fell, with city jobs in Q4 falling 13.7% from the preceding quarter.

Finally, and perhaps most importantly, the first domestic corporate bond default happened last week. Energy company Shanghai Chaori Solar failed on a £9m interest payment. The state has previously bailed out Chaori and other such businesses, but chose not to this time, generating much speculation from analysts.

Many say it was a necessary move from the government to install a better risk culture, tackle China’s credit problems and starting with the “painful adjustments” necessary to decelerate growth.

However, Bank of America Merrill Lynch stated “We doubt that the financial system in China will experience a liquidity crunch immediately because of this default, but we think the chain reaction will probably start.”

This was echoed by Philip Li of China’s International Credit Rating, calling it “a domino effect”, and coupled with Robert Peston’s recent BBC article (and other sources below), should help students construct a strong case that the risks of operating in China now outweigh the rewards.

The Sunday Times - China faces it's Shadow Banks

Business Week - How Chaori will deal with the default

Forbes - Trouble for China?

The Telegraph - The value of the shadow banks

BBC - Is the shadow banking sector due to fall?

BBC - Robert Peston's How China fooled the world

Even St Anthony can’t change the culture at Barclays

Monday, March 10, 2014

In 2012 Anthony Jenkins (nicknamed “Saint Anthony”) succeeded Bob Diamond and promised to clean up Barclays and eradicate the worst excesses of the banking industry. Speaking to those who received huge bonuses for unscrupulous behaviour, he said “my message is simple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues”.

Despite this, profit dropping 32% to £5.2bn, and making 3,700 jobs cuts last year:

  • Jenkin’s himself pocketed just under £5m in shares
  • Staff paid over £1m increased from 428 to 481.
  • The bonus pool increased 10% to 2.4b

The justification for this? Many senior traders have left, or threatened to do so, and to keep hold of the top earners, he had to offer top pay. Had he not, the investment wing of Barclays would have plunged into a “death spiral”, with staff and high-value customers going elsewhere.

This is part of the bigger issue regarding European Commission’s rule to reduce banking bonuses, how George Osborne is fighting the decision and why, it would seem, he really didn’t need to as bosses of RBS (81% owned by tax payers) and HSBC also side-stepped the rule by giving large “fixed pay allowances” in the form of shares.

This story always provides great impetus for emotive debate on BUSS4 topics such as government intervention, culture, pay and leadership.

The Slowing Chinese Economy - Rebalancing Has Implications

Wednesday, February 19, 2014

The rate at which China's economy has grown in recent years (as measured by the growth in GDP) is slowing. China's economy is still growing - but slower - and this has significant implications for both domestic and overseas businesses in China as well as the rest of the world trading with China.

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Wages Vs Inflation

Thursday, December 12, 2013

Data published today by the Office for National Statistics once again shows that earnings have not risen above the rate of inlfation for the 5th year running.

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Marvin Gaye Introduces Macro Economics

Monday, November 18, 2013

A musical starter that introduces most elements of economic environment... in the funkiest way possible!

Marvin Gaye's Inner City Blues Video

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Rising Wages in China: Causes and Consequences

Sunday, November 03, 2013

Wages are rising fast in China – many economists believe that China has hit a stage in its development at which demand for labour starts to grow faster than supply, creating labour shortages and pushing up the price of labour (something economists refer to as a Lewis Turning Point).

Why is this and what are some of the key business implications?

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China’s Rebalancing Act - A Balanced China is a Slower China

We used the FT video below during our recent CPD days on China and it is an excellent introduction to a core issue for students looking at the opportunities and threats for businesses looking to trade with and in China.

China's stunning record of economic growth has largely been driven by investment and exports. In particular, following the global economic slowdown in 2007-10, China responded by accelerating investment in infrastructure projects and the programme of mass urbanisation which has created the largest human migration in history.

A consequence of this approach is that China's economic growth can be said to have been "unbalanced", with the economy over-reliant on investment spending which cannot be sustained indefinitely.

China is now looking to "rebalance". That's a key term that I fully expect to feature in strong essays written by AQA BUSS4 students in 2014.

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BUSS4 China - Osborne and Johnson in China

Tuesday, October 15, 2013

With the high-profile visits of George Osborne and Boris Johnson to China this week, there is a glut of resources available on the BBC website which could be very valuable to BUSS4 research.

Here are links to just a selection:

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Innovation Innovation Innovation

Friday, October 11, 2013

Innovation turns business markets upside down, it alters the price and use of resources, it creates and destroys revenue flows and profitability as well as the way we work.

Peter Day a former BBC presenter considers a significant changes in a BBC Radio 4 series this weekend. Consider how the internet, search engines and 3D printing or additive manufacturing might alter market production processes, job opportunities marketing and economies.

There is much to discover and discuss in his superb introductory article linked above. The broadcasts are linked here.

How recent Waitrose and ALDI location decisions give a good marketing insight

Tuesday, July 09, 2013

John Lewis are opening a store at Heathrow terminal 2, which will be the Partnership's smallest store, the first away from town and city centres and an important step in their international strategy. For a while I’ve been looking at the idea of place in the John Lewis marketing mix, and the business has clearly identified deeper trends in retail location.

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Low cost airlines

Friday, June 21, 2013

Excellent BBC2 business documentary last night on the growth of low cost airlines 'Flights and Fights: Inside the Low Cost Airlines'. The programme explores how Ryanair and Easyjet have transformed the European airline industry.

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Business response to the economic environment: zero hours contracts

Saturday, May 18, 2013

From the employer's point of view, a zero hours contract is a great example of the benefits of the flexible labour market. They allow the employer to change the number of hours an employee works each week, with more shifts offered when they are busy, and fewer when they are not; costs can therefore be controlled and matched more exactly to revenue. They are particularly popular with the fast food outlets like McDonalds and Subway, and high street chains like Boots and Sports Direct. Those employers draw heavily on the younger end of the labour market, with many of their staff being students who are looking for flexible shifts that work around their study hours; for them a zero hours contract may work well. However it is also important to consider whether this will have a detrimental effect on the business's culture;  with a high proportion of staff working irregular hours it may become much more difficult to instil a culture and sense of identity with the organisation.

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3 Businesses That Have Thrived during the Economic Downturn

Monday, May 13, 2013

It is now six years since the global financial crisis triggered a prolonged downturn in economic activity. The UK economy, like other developed economies, has struggled to escape from a period of stagnant economic growth.

However, despite the weak economy, many UK firms have succeeded in significantly growing their revenues and profits.

Here are three examples of such businesses. Their strategies for success are different – but there are also some similarities.

Can you compare and contrast these three – and also identify some other businesses that have enjoyed similar success despite the tough economic environment?

You might also consider:

  • What factors have driven revenue growth at each of the three businesses?
  • Has their growth strategy been based on organic or external development?
  • To what extent has their growth been driven by international expansion?
  • Do you think their recent success can be sustained?
  • What factors might that continued success depend on?

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Shocker or Cracker? BYOD and find out

Monday, April 29, 2013

Seeking a way to make costs, revenue and profits interesting for my business students and get them digging deep into the reality of cost control, revenue generation I developed the "Shocker or Cracker?" activity.

This requires students to conduct independent research within the classroom using their own electronic devices (laptop, tablet or samrtphone) and helps to generate a healthy sense of competition.

There has been increasing debate about the merits of adopting a Bring Your Own Device (BYOD) policy within schools and colleges so I thought I'd give it a go...

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BUSS4 Revision: Economic Environment for UK Businesses

Saturday, April 27, 2013

Here is an updated revision presentation on aspects of the economic environment for UK businesses in the late spring of 2013.

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Return on Capital: a snapshot of British Business

Friday, April 26, 2013

Whenever you are investigating a firm’s accounts – perhaps using ratio analysis – you quickly realise that the answers you’re generating only really make sense when you compare them against something, like last year’s figures, or those of a rival.

My students are looking at a case study (OCR F297) in which a firm is making a return on capital of approximately 11%.  We were wondering if that was a ‘good’ return or not.  I’ve come across an article that directly answers that question, and raises some other points that offer a revealing insight into the health of Britain’s businesses.

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Is the return of Pot Noodle further evidence of the decline of outsourcing?!

Friday, March 22, 2013

Perhaps we’re all guilty of picking up on ideas or stories that support a particular view that you feel is right.  Ever since I began reading about doubts over the benefits of outsourcing and offshoring I’ve seen more stories on the same theme.  There was Bob, who had outsourced his own IT job to China.  Then came a special report in The Economist that asked some searching and detailed questions too (you can read more here).

And now the definitive proof - the "Nation's Noodle" is coming home. Golden Wonder's pot noodles are currently made in China and shipped 10,000 miles to the UK, but the 191-year-old British company that makes the product has cancelled its Chinese contracts in favour of making its own noodles in Leeds.

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The Pound ‘falls in value’ - what does this mean for firms?

Wednesday, February 27, 2013

The value of the pound - or the exchange rate - is back in the news.  It looks as though enough international investors have sold £££s that its value has fallen quite sharply.  Here are some reminders of what this means, and some helpful reading links.

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The T in SWOT is Becoming More Important to Global CEOs

Monday, February 11, 2013

Threats - the T in SWOT analysis - are increasingly important to the CEOs of leading companies around the world.

Today's CEOs are concerned about a wide range of potential and ongoing threats to their business growth prospects - from catastrophic events, to economic and policy threats, and commercial threats.

In this short video from PwC, CEOs from a range of companies around the world, talk about their key concerns and the potential impact of these disruptions.

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Amazon - Work hard and ... er, work hard.

The FT today publishes a great report on the culture at Amazon's Rugeley distribution centre. An interesting insight into the culture of a cost focussed and highly effiecient business that is described by founder Jeff Bezos as: "Our culture is friendly and intense but if push comes to shove, we'll settle for intense."

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Findus hurdles to uncertainty

Friday, February 08, 2013

If you had lasagne last night you might be wondering if it was the last remains of the non-running hurdler "100% Pure Beef". Findus have a major problem to resolve after tests showed that their lasagne had been made from horsemeat.

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Is outsourcing about to go into decline?

Monday, January 21, 2013

This is a big story, given its own special report by The Economist – and it's a highly recommended read for A2 Business Students.

The central thrust of their argument is that the advantages of offshoring work (outsourcing overseas) are falling, fast.  The logic of returning work to the developed economies looks fairly convincing.

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Now Blockbuster fails ... is the High Street dying?

Thursday, January 17, 2013


I adapted the title for this blog from an article and video clip I came across in the Telegraph, which contains the observation that "consumers forgot that Blockbusters still existed".  I don't really think its demise was very hard to predict, and I think most of you will have seen this coming for some time.

But with the decline of Blockbusters - and so much other bad news on the High Street - I've decided to bundle together a lot of ideas and links to encourage students to work independently on this topic, to see if they can understand some of the forces putting pressure on our High Streets at the moment.

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Jessops goes into Administration Is the Niche Market a Tomb?

Wednesday, January 09, 2013

This afternoon The High Court appointed PricewaterhouseCoopers as Administrators of Jessops the high street camera retailer. The company has debts of £80m.

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China No Longer an Emerging Market - Soon to be the Biggest Market

Saturday, November 10, 2012

This is a really important development for business students who need to appreciate the dynamics of the global economy to understand. The OECD has forecast that, within four years, China will overtake the USA to become the largest economy in the world. The value of China's GDP in 2013 alone is forecast by the OECD to be bigger than all the Eurozone economies put together. China has arrived - and it has hugely significant implications for business.

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Business Cycle Lesson Activity

Saturday, November 03, 2012

I'm going to be discussing economic growth and the business cycle in my first Business Studies lesson back after half term, and am hoping this activity will really help the students to think carefully about how the changing business cycle affects a business.

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Deal or No Deal

Monday, October 08, 2012

As the October 10th deadline approaches, the board of BAE face significant difficulties to complete the proposed merger with EADS. 

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Demand - For Business Students

Friday, October 05, 2012

Here is a useful article from the BBC  which discusses how the weather can influence how much we spend. A handy starter to show that demand isn't always solely influenced by price. You can use the additional Q&A section here as an extension for your brighter students.

BAE EADS - Will the merger stall or take off?

Tuesday, October 02, 2012

The BAE EADS merger proposal ought to help pupils attempt develop analytical skills using PESTLE, SWOT or stakeholder models. Can you use these management tools to develop your analysis and evaluation and go beyond application and understanding?

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Foolish business error number 9,763,252

Friday, September 28, 2012

Or should that be 520 million?  That’s the amount that one trader apparently spent, in dollars, in a drunken night betting his company’s money on oil price movements.  He initially lost almost $10m (hence the title of this blog).

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The Wonder of Wonga

Monday, September 17, 2012

If you want to show students an example of how even the worst of economic downturns can still present an opportunity for some businesses then you could do worse than show them this article from the BBC about the net profit figures from pay-day loan specialists  The article reports that Wonga have seen a trebling of their profits during 2011 as customers feel the pinch of the recession and look for a quick way to raise cash.

The article strays a little into negative reporting but it reminded me of a lesson I observed last year where the interest rate charged by Wonga was used as an example for students who were calculating compound interest using spreadsheets (you're not a true teacher of business studies until you've attempted to deliver a lesson on compound interest!).  Given the APR levels set by the company, students were calculating that a £100 loan that was not paid back for 4 years would accrue a debt of £315 million!

Up Up and Away

Wednesday, September 12, 2012

British Aerospace (BAE Systems) and EADS announced that they are discussing a merger.

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USP humour

Tuesday, August 28, 2012

Building up market share in a competitive market with mature brands, similar products and large rivals can be difficult, but attracting the attention or interest of potential customers may require innovative approaches to marketing.

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The UK economics puzzle - rising employment but falling GDP

Thursday, August 16, 2012

Here’s a conundrum. Why is employment in the UK economy rising (and unemployment falling) at a time when the economy is still shrinking?

The number of people out of work fell by 46,000 to 2.56 million in the three months to June 2012, according to the Office for National Statistics (ONS). But in the same period the UK’s national output is supposed to have shrunk by 0.7% - so what is behind the puzzling statistics?

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Problems with over capacity in the car market

Monday, August 13, 2012

The car industry is such a good place to go for examples of Business Studies in action.  Here, the problem under discussion is capacity utilisation.  This concept is very closely linked to the idea of a breakeven point.

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Economic Influences in action - austerity hits IWB maufacturer Promethean

Friday, July 27, 2012

Business Studies students often find economic influences a difficult topic to get to grips with. Here is a current example of a firm that has been hit by tighter government budgets brought about by recession and the need to cut spending.

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